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GBP/USD: the pound left without support 23 June 2017, 14:16


Scenario
Timeframe Weekly
Recommendation SELL
Entry Point 1.2725
Take Profit 1.2560, 1.2500
Stop Loss 1.2940
Key Levels 1.2125, 1.2285, 1.2365, 1.2500, 1.2620, 1.2700, 1.2770, 1.2815, 1.2860, 1.2890, 1.2955, 1.3040, 1.3075, 1.3115

Current trend
The pound has been falling against USD for a month in view of investor demand for dollar and negative fundamental background in the UK. Undoubtedly, the main catalyst of this tendency was the decision of FOMC to increase the key interest rate, as well as comments about further increases in the current year.
Another imporant factor determining the fall of GBP/USD is a series of negative data on the main sectors of the UK economy. Thus, in the recent two weeks weak releases on the main indexes, labor market, and net borrowings were published. Moreover, negative factors may include the preservation of the key interest rate on the minimal level and guarded comments about the possibility of ints increase and winding up the stimulation program of the British economy.
Today in the first part of the day the pound gained investor support and managed to slightly strengthen its positions against USD. There are no important macroeconomic releases scheduled for Friday that might influence the dynamics of the pair.
Support and resistance
In the future the pair is likely to enter a long period of upward correction followed by a fall. Right now the economic indicators of the UK are not so good, and therefore the pair may show growth only in view of negative US releases. However, this growth will be limited by key resistance levels.
The participants of the market have to pay attention only to the final data on the US economic growth rate that will be published in the end of the week. It means that for the first half of the week the pair will be trading in the narrow side range.
Technical indicators point to the continuation of the downward trend. The volumes of short positions in MACD indicator remain high, and on the D1 chart at the level of 1.2770 the pair is to face the middle line of Bollinger Bands that will be a strong obstacle for upward movement.
Support levels: 1.2770, 1.2815, 1.2860, 1.2890, 1.2955, 1.3040, 1.3075, 1.3115.
Resistance levels: 1.2700, 1.2620, 1.2500, 1.2365, 1.2285, 1.2125.

Trading tips
In this situation, short positions will become relevant on the current level with targets at 1.2560, 1.2500. Stop-loss may be placed at 1.2940.
Από το Blogger.